Memphis files foreclosure lawsuit against Wells Fargo
Bank foreclosures in Memphis and other parts of Shelby County in Tennessee are being blamed on giant financial services provider Wells Fargo
The city and the county have filed a civil litigation case against Wells Fargo alleging that Charlotte-based bank Wachovia, which Wells Fargo acquired in December last year, engaged in predatory lending practices that resulted in a disproportional number of foreclosures in minority communities in Memphis.
The lawsuit is using the Fair Housing Act, which prohibits unlawful, unfair, irresponsible, discriminatory and deceptive mortgage lending practices.
It further alleges that Wachovia targeted minority communities, resulting in abandoned houses, extreme blight, low property values and low tax revenues in communities with high concentration of home foreclosures.
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In response, Wachovia stated that the economic problems of Memphis should not be blamed on a single lender. It reiterated that Wachovia has fair and nondiscriminatory lending policies that it has been implementing over the years. The bank stated that the city and the county have a weak argument and that similar lawsuits filed in other cities have already been rejected.
The bank also added that the problem of REO bank foreclosures in Memphis can be solved only if lenders and elected local officials work together to find solutions and not fight through the courts. It reiterated that it will continue to serve the city of Memphis and the county of Shelby using responsible and fair lending policies.
In 2009, the city council of Memphis and the Shelby County Commission have authorized the filing of lawsuits against lenders to find compensation for losses arising from discriminatory lending practices.
Under the lawsuit filed by Memphis and Shelby, Wells Fargo is being required to stop foreclosure activities in the city of Memphis and to compensate Memphis and Shelby for unspecified damages.
Wells Fargo, which has $1.3 trillion in total assets, agreed to purchase Wachovia in the fall of 2008 after the Federal Deposit Insurance Corporation decided that Wachovia needs to be saved from imminent collapse. Wells Fargo finished the acquisition process on the last day of 2008.
The Memphis metro area experienced more than 4,100 foreclosure postings in the third quarter last year, ranking 55th in a chart of 203 metro areas with high foreclosure rates.
In November 2009, total foreclosure filings in Shelby County reached 12,625, including 4,258 REO bank foreclosures and 2,248 properties being sold off through the county trustee.
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Source: http://www.foreclosuredeals.com/wp/reo-bank-foreclosures-in-memphis-blamed-on-wells-fargo/
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